Local Unions Still Resistant to Concessions Despite Bad Economy

On a local level, Governor Paterson recently proposed the layoffs of nearly 9000 state workers if the union does not make any attempt to help him find $500,000,000 in cost savings; the MTA voted today to raise fares approximately 23%, raise bridge tolls, cut services and layoff workers unless the state votes to help bail them out and Suffolk County Executive Steve Levy has sent out 2,200 notices to some county workers putting them on notice for the potential layoff of 386 persons if the unions do not agree to some concessions.

As the State and local governments struggle to bring their budgets in order and minimize their looming deficits, the biggest area of contention are with the unions. Note here that I am speaking only about unions that represent employees who work in any public service sector supported by taxpayer dollars; the United Auto Workers, the teamsters and the like who work for large private corporations fall into a different category for purposes of this discussion. Anyhow, we must admit that the generous union contracts entered into during the previous boom years are crippling state and locals governments alike in their ability to trim their budgets as they stare down the failing economy.

Now it may not seem from any of my previous posts that I have any support for unions but I do believe that unions have a noble purpose in providing employment security for many citizens. Certainly this purpose was critical during much of the 20th century to balance out huge employee/employer discrepancies and abuses. Yes, we needed unions to reset the playing field and that did take place. Now, unions are reaping generous benefits above and beyond what employees of private enterprise could ever hope to attain. In addition, these private employees most shoulder the higher tax burden required to pay for all of those union perks.

I believe that a shift in the balance between the benefits of public and private employment requires an re-evaluation of union benefits. So, at the very least, unions should be reasonable when it comes to economic crisis. For the majority of New Yorkers who are not in a union, the axe could come at any time. While they work fearful for their livelihood, union members have the advantage of negotiation before the axe falls. Yet, union members are acting like the Wall Street folk, defending their entitlement to their generous contracts.

Recently, union members protested County Executive Levy's proposal to cut some county jobs as they have the right. But, listening to some of their defense made it hard to sympathize. Many lamented with indignation how it was unfair for them to work within an environment where their jobs were threatened. Hello! Times have changed. If we continue to pay you, our whole government welfare is on the line. When the analogy is used by Obama and Bernanke alike that when your neighbors house is burning - in an upside down mortgage or potential foreclosure - we have to save them with a housing bailout to save the neighborhood. How about public service union employees realizing that if they don't sacrifice a little now, the future could be bad for all of us?

The Suffolk County employees are being asked to accept a lag payroll, meaning that they will sacrifice 10 days of pay now to be paid at a higher rate when they retire. They are still going to get the money, just not now. One Suffolk employee even suggested raising taxes as being better than laying of people. Huh! For God's sake, none of the concessions sound so bad if you still get to keep your job. And, what about the ones who do end up being laid off? They will still get their pensions. The rest of us have to rely on our own 401k/IRA savings, which averaged just $15,000 per employee by 2008 estimates though I'm sure they are worth considerably less now with the market so topsy-turvy. This is pitiful compared to the value of a union pension.

While private employees have to save for their own retirements, public employees earn retirement credits for each year that they work. It is hard to feel bad for them right now when a large portion of their health insurance is being paid and they receive generous holiday and vacation days. They had a good run but if we all have to pay the piper, then they should too. How can they still remain reluctant to do so?